Calculating Your Business Vehicle Expenses
There are two ways to calculate your business
vehicle expenses if you qualify: the Standard
Mileage Rate Method or the Actual Vehicle
Expenses Method. You can use whichever method
results in a higher business deduction by the end
of the year. Most providers will probably find it
easier to use the Standard Mileage Rate Method.
Standard Mileage Rate Method
If you use the Standard Mileage Rate Method,
record all business trips in the Mileage Log (pages
8 to 33). Although the IRS does not require you
to record odometer readings for each business
trip, it is a good idea to do so. If you don’t record
odometer readings after each trip, you can simply
record the number of business miles after each
trip. For multiple trips to the same destination,
record the business mileage once and use the
same number for all subsequent trips. Total the
business miles and parking and toll expenses on
each page of the Mileage Log. Enter the total
from these pages onto the calculation form for
the Standard Mileage Rate Method (page 34).
Complete the Annual Vehicle Expenses/Deprecia-
tion form (page 46) and then transfer these
figures to the calculation form for the Standard
Mileage Rate Method. Determine the total busi-
ness vehicle expenses by following the directions.
Actual Vehicle Expenses Method
If you use the Actual Vehicle Expenses Method,
record all business trips in the Mileage Log
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